Following the entry into force of the Interim Measures for Carbon Emissions Trading, which provide the legal basis for the Chinese national emissions trading system (ETS), the exact nature of the Chinese carbon market is now becoming clearer.

According to Jiang Zhaoli, a senior official with the National Development and Reform Commission (NDRC), China plans to initially include six sectors in its national ETS: power generation, metallurgy and nonferrous metals, building materials, chemicals, and aviation. Entities emitting more than 26,000 tCO2/year will be covered by the national ETS, giving the Chinese carbon market an estimated CO2 emissions coverage of three to four billion tons. This would establish the Chinese ETS as the world’s largest system, twice the size of the EU ETS – currently the world’s largest operating ETS.

Mr. Jiang expects the national ETS to launch in the summer of 2016, starting with a three-year pilot phase before becoming fully functional in 2019 (Media report – Chinese).

Moreover, the NDRC announced (Chinese) the start of the national registry for CCERs (Chinese Certified Emission Reductions), which can be used as offset credits in the pilot systems and will also be eligible in the national system. The national registry is administered by the National Center for Climate Change Strategy and International Cooperation (Chinese) (NCSC) and is connected to the registry systems of all seven Chinese pilots.